SEBI Releases Master Circular On Surveillance of Securities Market

Under the new guidelines, SEBI mandates that trading in certain securities, including those affected by corporate actions such as mergers, demergers, and capital reductions, must initially occur in the Trade for Trade (TFT) segment.

Trade for Trade segment refers to a trading mechanism where transactions are settled on a trade-to-trade basis. This means that every trade conducted in this segment must result in delivery and payment.

Further, SEBI stated that it is important to have a stringent oversight over unauthenticated news and market rumours. The circular stated that such misinformation, often disseminated through social media and other platforms by market intermediaries, can distort market behavior and compromise investor confidence. To counter this, SEBI directs registered market intermediaries to implement robust internal controls, including strict codes of conduct and monitoring mechanisms.

SEBI has also stressed upon reporting obligations under the SEBI (Prohibition of Insider Trading) Regulations, 2015. Listed companies, intermediaries, and fiduciaries are required to promptly disclose any violations related to the Code of Conduct (CoC) governing insider trading. This includes maintaining comprehensive logs of all market-related communications and ensuring adherence to prescribed disclosure formats.

SEBI has updated guidelines concerning the closure of trading windows during sensitive periods such as financial disclosures. The new framework mandates the freezing of Permanent Account Numbers (PAN) at the security level to prevent designated persons from trading when in possession of unpublished price-sensitive information (UPSI).

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